I found the perfect converter to put you DVD collection on the dsm-520. Its dvdfab platinum version. Set it to convert to ipod, then in the advanced settings, raise the volume to 150% and make sure to change the screen size to 720x???, not the default ipod setting. Also, change the bitrate to 2000. This will give very nice quality on a big screen letterboxed. And the audio will be just right.
This creates an mp4 file that dsm-520 plays. And the quality is near DVD, while reducing the file size from 4GB to 2GB.
Then you can use the dlink dns323 to store your video files on, and bypass that 4GB dns323 limit problem.